Publications
& Policy

While challenges remain in the UK economy, such as low productivity and continued political uncertainty, the UK’s private equity and venture capital industry has demonstrated its resilience by continuing to deliver substantial amounts of cash distributions to investors. Over the longer term, private equity continues to comfortably outperform public markets. The overall since-inception return has been steady, increasing to 14.5% in 2017 and demonstrating significant levels of stability in overall returns. Against a backdrop of political uncertainty in the UK and abroad, the industry continues to grow with all of the funds covered in the survey generating one-year IRRs of 38.5%. This compares favourably with the FTSE All-Share of 13.1% for the same period.

The Mid-Market Eurozone Index: The Argos Mid-Market Index measures the evolution of euro zone private Mid-Market company valuations. Carried out by Epsilon Research for Argos Wityu and published every three months, it reflects median EV/EBITDA multiples, on a six-month rolling basis, of Mid-Market M&A transactions in the euro zone.

This study presents the second part of the results from the first EIF VC Survey, a survey among venture capital general partners (GPs)/management companies headquartered in the EU-28 and some additional countries (mainly Norway, Switzerland and Turkey). The surveyed population includes both companies in which the EIF has invested as well as companies in which the EIF has not (or not yet) invested.

"Investors can capture more value by focusing on three best practices in private equity portfolio company exits."

In this response we outline several concerns regarding the EBA suggested approach to define the concepts of “investments in private equity” or “investments in venture capital firms” in the context of Article 128 of the Capital Requirements Regulation, as the proposed definitions could create more confusion than clarity, disicentivise banks' investment into private equity and venture capital funds and create a negative precedent for the industry in other legislation.

An Invest Europe study into private equity activity in Central and Eastern Europe. This report provides annual private equity and venture capital fundraising, investment and divestment statistics for the private equity markets of the CEE region in 2017.

We study employment and wages after private equity buyouts in Germany. We conduct matched-sample difference-in-differences estimations at the establishment and at the individual employee level with more than 152,000 buyout employees and a carefully matched control group. Employees of buyout targets experience earnings declines of €980 in the fifth year after the buyout, or 2.8% of median earnings. Separation rates increase significantly after buyouts, but about half of separations are compensated by additional hiring. Managers, older and white-collar employees fare worse than the average employee, but theories based on technological modernization, organizational streamlining, or a transfer of wealth can explain only little of the variation in employment outcomes across groups of employees. We argue that some employees fare worse after buyouts because turnover increases and they find it harder to regain employment.

An in-depth study which outlines the tax environments for the private equity and venture capital industry around Europe, carried out in association with KPMG.

An introduction to the voluntary passport regime offered by the revised European Venture Capital Fund Regulation.

The Invest Europe Annual Report provides an overview of Invest Europe's activities during the 12 months to June 2018 in fields including public affairs, data & research, events and communications. The report includes a financial statement.

This consultation response explains that problems may arise as under the new standard, unrealised gains/losses would be immediately reflected in the Profit and Loss Statement (P&L). We propose flexibility to allow recycling for investors, i.e. to recognize unrealized gains and losses in Other Comprehensive Income and then recycle to the P&L, or if it wished to recognize unrealized gains and losses in the P&L straight away, then this would avoid unrealised gains/losses being immediately reflected in the P&L while not enabling the investor to use recycling as an earnings management tool.

McKinsey & Company: For years, bond financing was largely favored only by the largest US corporations. But over the past ten years, companies around the world have joined in, giving corporate bond markets outside of the United States new life. This is a long-awaited development that indicates a welcome diversification of global corporate funding and the potential for more financial stability. But the bull market in bonds has also brought some risks. The fact that corporate debt has grown nearly as much as government debt over the past decade is cause for closer scrutiny of the sustainability of the market, if not concern. Our analysis shows that some borrowers with little capacity for a downturn in their finances have accessed the market; we may see a rise in defaults in the coming years as a result. The question remains whether the corporate bond market will continue to grow deeper and broader as interest rates rise and investors bear the cost of more corporate defaults. There is significant scope for further growth in corporate bond markets outside the United States, but our analysis clearly points to bumps in the road ahead.

This position paper raises the concerns of private equity firms holding MiFID license regarding the new prudential regime proposed by the European Commission. It suggests that the new regime will lead to a significant increase in capital requirements for these investment firms, which is not proportionate to the risk they pose.

In this position paper, we welcome the European Commission's targeted amendments to AIFMD, ELTIF and EuVECA to reduce regulatory barriers to the cross-border distribution of investment funds in the EU but stress that the proposed Directive and Regulation are insufficiently tailored to the private equity and venture capital asset class, in particular regarding the definition of pre-marketing.

The most comprehensive source of European private equity and venture capital fundraising, investment and divestment data. With statistics on more than 1,250 firms, the 2017 report covers 89% of the €640bn of private equity capital under management in Europe.